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Roberts Company issued $1,000,000 of 8% bonds due in 5 years with interest payable annually...

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Accounting

Roberts Company issued $1,000,000 of 8% bonds due in 5 years with interest payable annually on December 31. The yield rate was 7%. The bond was issued with a premium of $41,002. The cash paid on December 31 of the first year will be $80,000. How much will interest expense be?

a.$7,130

b.$72,870

c.$33,872

d.$41,002

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